13 EmployersConfederationofthe Philippines v. NWPC

5/19/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 201
VOL. 201, SEPTEMBER 24, 1991 759

Employers Confederation of the Phils. vs. National Wages and
Productivity Commission
*
G.R. No. 96169. September 24, 1991.
EMPLOYERS CONFEDERATION OF THE PHILIPPINES,

petitioner, vs. NATIONAL WAGES AND PRODUCTIVITY
COMMISSION AND REGIONAL TRIPARTITE WAGES AND
PRODUCTIVITY BOARD-NCR, TRADE UNION CONGRESS
OF THE PHILIPPINES, respondents.
Labor Law; Wages; The National Wages and Productivity Commission

noted that the determination of wages has generally involved true methods,
the “floor-wage” method and the “salary-ceiling” method.—In the National
Wages and Productivity Commission’s Order of November 6,1990, the
Commission noted that the determination of wages has generally involved
two methods, the “floor-wage” method and the “salary-ceiling” method.
Same; Same; Same; Republic Act No. 6727 was intended to rationalize
wages. first, by providing for full-time boards to police wages round-the-
clock and second by giving the boards enough powers to achieve this
objective.—As the Commission noted, the increasing trend is toward the
second mode, the salary-cap method, which has reduced disputes arising
from wage distortions (brought about, apparently, by the floor-wage
method), Of course, disputes are appropriate subjects of collective
bargaining and grievance procedures, but as the Commission observed and
as we are ourselves agreed, bargaining has helped very little in correcting
wage distortions. Precisely, Republic Act No. 6727 was intended to
rationalize wages, first, by providing for fulltime boards to police wages
round-the-clock, and second. by giving the boards enough powers to
achieve this objective.
Same; Same; Same; Court not convinced that the Regional Board of
the National Capital Region in decreeing an across-the-board hike
performed an unlawful act of legislation.—The Court is not convinced that
the Regional Board of the National Capital Region, in decreeing an across-
the-board hike, performed an unlawful act of legislation. It is true that wage-
fixing, like rate-fixing, constitutes an act Congress; it is also true, however,
that Congress may delegate the power to fix rates provided that, as in all
delegations cases, Congress leaves sufficient standards. As this Court has
indicated, it is impressed that the
https://central.com.ph/sfsreader/session/000001798516df76f74eecb5000d00d40059004a/t/?o=False 1/10
________________
* SECOND DIVISION.
760
780 SUPREME COURT REPORTS ANNOTATED
Employers Confederation of the Phils. vs. National Wages and Productivity

Commission
above-quoted standards are sufficient, and in the light of the floorwage

method’s failure, the Court believes that the Commission cor-rectly upheld
the Regional Board of the National Capital Region.
Same; Same; Same; The Act as meant to nationalize wages that is, by
having permanent boards to decide wages rather than leaving wage
determination to Congress year after year and law after law.—lt is the
Court’s thinking, reached after the Court’s own study of the Act, that the Act
is meant to rationalize wages, that is, by having permanent boards to decide
wages rather than leaving wage"determination to Congress year after year-
and law-.after law. The Court is not of course saying that the Act is an effort
of Congress to pass the buck, or worse, to abdicate its duty, but simply, to
leave the question of wages to the expertise of experts.
Same; Same; Definition of.—The Labor Code defines “wage” as
follows: “Wage” paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same; which is payable by an
employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be
rendered and includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging, or other facilities customarily
furnished by the employer to the employee “Fair and reasonable value” shall
not include any profit to the employer or to any person affiliated with the
employer,,
PETITION for review from the decision of the National Wages and
Productivity Commission,
The facts are stated in the opinion of the Court.

Sycip, Salazar, Hernandez & Gatmaitan for petitioner;
Gilbert P. Lorenzo for private respondent.
SARMIENTO, J.;
The petition is given due course and the various pleadings submitted
being sufficient to aid the Court in the proper resolution of the basic
issues raised in this case, we decide it without further ado.
The Employers Confederation of the Philippines (ECOP) is
761
VOL. 201, SEPTEMBER 24, 1991 761

questioning the validity of Wage Order No. NCR-01-A dated

October 23, 1990 of the Regional Tripartite Wages and Productivity
Board, National Capital Region, promulgated pursuant to the
authority of Republic Act No. 6727, “AN ACT TO RATIONALIZE
WAGE POLICY DETERMINATION BY ESTABLISHING THE
MECHANISM AND PROPER STANDARDS THEREFOR,
AMENDING FOR THE PURPOSE ARTICLE 99 OF, AND
INCORPORATING ARTICLES 120, 121, 122, 123, 124,126, AND
127 INTO, PRESIDENTIAL DECREE NO. 442 AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES, FIXING NEW WAGE RATES, PROVIDING
WAGE INCENTIVES FOR INDUSTRIAL DISPERSAL TO THE
COUNTRYSIDE, AND FOR OTHER PURPOSES," was approved
by the1 President on June 9,1989, Aside from providing new wage
rates, the “Wage Rationalization Act” also provides, among other
things, for various Regional Tripartite Wages and Productivity
Boards in charge of prescribing minimum wage rates for all workers
2
in the various regions, and for a National Wages and Productivity
Commission to review,3 among other functions, wage levels
determined by the boards.
On October 15, 1990, the Regional Board of the National Capital
Region issued Wage Order No. NCR-01, increasing the minimum
4
wage by P17.00 daily in the National Capital Region. The Trade
Union Congress of the Philippines (TUCP) moved for
reconsideration; so did 5the Personnel Management Association of
the Philippines (PMAP). ECOP opposed.
On October 23, 1990, the Board issued Wage Order No. NCR01-
A, amending Wage Order No. NCR-01, as follows:
________________
1 Rep. Act No. 6727, sec. 4(a).

2 Supra, art. 3
3 Supra.
4 Wage Order No. NCR-01 (RTWPB) (DOLE), October 15, 1990; the Order
exempts, of course, domestics and other household servants.
5 Wage Order No. NCR-01-A (RTWPB) (DOLE), October 23, 1990.
762

Section 1. Upon the effectivity of this Wage Order, all workers and
employees in the private sector in the National Capital Region already
receiving wages above the statutory minimum wage rates up to one hundred
and twenty-five pesos (P1 25.00) per day shall also receive an increase of
seventeen pesos (P17.00) per day.
ECOP appealed to the National Wages ‘and Productivity

Commission. On November 6, 1990, the Commission promulgated
an Order, dismissing. the appeal for lack of merit. On November 14,
1990, the Commission denied.reconsideration. The Orders of the
Commission (as we’ll as Wage Order No. NCR-01-A) are the
subject of this petition, in which ECOP assails the board’s grant of
an “across-the-board” wage increase to workers already being paid
more than existing minimum wage rates (up to P125.00 a day) as an
alleged excess of authority, and” alleges that under the Republic Act
No. 6727, the boards may only prescribe “minimum wages,” not
determine “salary ceilings/' ECOP likewise claims that Republic Act
No. 6727 is meant to promote collective bargaining as the primary
mode of settling wages, and in its opinion, the boards can not
preempt collective bargaining agreements by establishing ceilings.
ECOP prays for the nullification of Wage Order No. NCR01-A and
for the “reinstatement” of Wage Order No. NCR-01 The Court
directed the Solicitor General to comment on behalf of the
Government, and in the Solicitor General’s opinion, the Board, in
prescribing an across-the-board hike did not, in reality, “grant
additional or other benefits to workers and employees, such as the
extension of wage increases to employees and workers already
6
receiving more than minimum wages . . ." but rather, fixed
minimum wages according to the “salary-ceiling method,”
ECOP insists, in its reply, that wage-fixing is a legislative
function, and Republic Act No. 6727 delegated to the regional
boards no 7more “than the power to grant minimum 8 wage
adjustments" and “in the absence of clear statutory authority,"
________________
6 Id., 76.
7 Id., 91.
8 Id.
763
VOL. 201, SEPTEMBER 24, 1991 763

9
the boards may no more than adjust “floor wages."
The Solicitor General, in his rejoinder, argues that Republic Act
No. 6727 is intended to correct “wage distortions” and the salary-
ceiling method (of determining wages) is meant, precisely, to rectify
10
wage distortions.
The Court is inclined to agree with the Government. In the
National Wages and Productivity Commission’s Order of November
6,1990, the Commission noted that the determination of wages has
generally involved two methods, the “floor-wage” method and the
“salary-ceiling” method. We quote:
Historically, legislation involving the adjustment of the minimum wage

made use of two methods. The first method involves the fixing of
determinate amount that would be added to the prevailing statutory
minimum wage. The other involves “the salary-ceiling method” whereby
the wage adjustment is applied to employees receiving a certain
denominated salary ceiling. The first method was adopted in the earlier
wage orders, while the latter method was used in R.A. Nos. 6640 and 6727.
Prior to this, the salary-ceiling method was also used in no less than eleven
issuances mandating the grant of cost-of-living allowances (P.D. Nos. 525,
1123, 1614, 1634, 1678, 1713 and Wage Order Nos. 1, 2, 3, 5 and 6). The
shift from the first method to the second method was brought about by labor
disputes arising from wage distortions, a consequence of the implementation
of the said wage orders. Apparently, the wage order provisions that wage
distortions shall be resolved through the grievance procedure was perceived
by legislators as ineffective in checking industrial unrest resulting from
wage order implementations. With the establishment of the second method
as a practice in minimum wage fixing, wage distortion disputes were
11
minimized.
As the Commission noted, the increasing trend is toward the second

mode, the salary-cap method, which has reduced disputes arising
from wage distortions (brought about, apparently, by the floor-wage
method). Of course, disputes are appropriate subjects of collective
bargaining and grievance procedures, but
________________
9 Id.
10 Id., 122.
11 Id., 27.
764
764 SUPREME COURT REPORTS -ANNOTATED

Employers Confederation of the Phils. us. National Wages and

as the Commission observed and as we are ourselves agreed,

bargaining has helped very little in correcting wage distortions.
Precisely, Republic Act No. 6727 was intended to rationalize wages,
first, by providing for full-time boards to police wages round-the-
clock, and second, by giving the boards enough powers to achieve
this objective. The Court is of the opinion that Congress meant the
boards to be creative in resolving ;the annual question of wages
without labor and management knocking on the legislature’s door at
every turn. The Court’s opinion is that if Republic No. 6727
intended the boards alone to set floor wages, the Act would have no
need for a board but an accountant to keep track of the latest
consumer price index, or better. would have Congress done it as the
need arises, as the legislature, prior to the Act, has done so for years.
The fact of the matter is that the Act sought a “thinking” group of
men and women bound by statutory standards. We quote:
ART. 124. Standards/Criteria for Minimum Wage Fixing.—The regional

minimum wages to be established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the minimum standards of
living necessary for the health, efficiency and general well-being of the
employees within the framework of the national economic and social
development program. In the determination of such regional minimum
wages, the Regional Board shall, among other relevant factors, consider the
following:
"(a) The demand for living wages;

"(b) Wage adjustment vis-a-vis the consumer price index;
"(c) The cost of living and changes or increases therein;
"(d) The needs of workers and their families;
"(e) The need to induce industries to invest in the countryside;
"(f) Improvements in standards of living;
"(g) The prevailing wage levels;
"(h) Fair return of the capital invested and capacity to pay of employers;
"(i) Effects of employment generation and family income; and
"(j) The equitable distribution of income and wealth along the
12
imperatives of economic and social development."
________________
12 Rep. Act No. 6727, supra.
765
VOL. 201, SEPTEMBER 24, 1991 765


Productivity Commision
The Court is not convinced that the Regional Board of the National
Capital Region, in decreeing an across-the-board hike, performed an
unlawful act of legislation. It is true that wagefixing, like rate-fixing,
13
constitutes an act Congress; it is also true, however, that Congress
14
may delegate the power to fix rates provided that, as in all
delegations cases, Congress leaves sufficient standards. As this
Court has indicated, it is impressed that the above-quoted standards
are sufficient, and in the light of the floor-wage method’s failure, the
Court believes that the Commission correctly upheld the Regional
Board of the National Capital Region.
Apparently, ECOP is of the mistaken impression that Republic
Act No. 6727 is meant to “get the Government out of the industry”
and leave labor and management alone in deciding wages. The
Court does not think that the law intended to deregulate the relation
between labor and capital for several reasons: (1) The Constitution
calls upon the State to protect the rights of workers and promote
15
their welfare; (2) the Constitution also makes it a duty of the State
“to intervene when the common goal so demands” in regulating
16
property and property relations; (3) the Charter urges Congress to
give priority to the enactment of measures, among other things, to 17
diffuse the wealth of the nation and to regulate the use of property;
(4) the Charter recognizes the “just share of labor in the fruits of
18
production;" (5) under the Labor Code, the 19
State shall regulate the
relations between labor and management; (6) under Republic Act
No. 6727 itself, the State is interested in seeing
________________
13 Shreveport Rate Case, 234, U.S. 342 (1914). But see Philippine
Communications Satellite Corporation v. Alcuaz, G.R. 84818, December 18,
1989,180 SCRA 218. on when rate-fixing is quasi-judicial for purposes of
determining compliance with due process.
14 Supra.
15 CONST., art II, sec. 18.
16 Supra, art, XII, sec. 6.
17 Supra, art, XIII, sec. 1.
18 Supra, sec. 3.
19 Pres. Decree No. 442, art 3.
766

Employers Confederation of the Phils, vs. National Wages and
20
20
that workers receive fair and equitable wages; and (7) the
Constitution is primarily a document of social justice, and although
21
it has recognized the importance of the private sector, it has not
22
embraced fully the concept of laissez faire or otherwise, relied on
pure market forces to govern the economy; We can not give to the
Act a meaning or intent that will conflict with these basic principles.
It is the Court’s thinking, reached after the Court’s own study of
the Act, that the Act is meant to rationalize wages;that is, by having
permanent boards to decide wages rather than leaving wage
determination to Congress year after year and law after law. The
Court is not of course saying that’ the Act is an effort of Congress to
pass the buck, or worse, to -abdicate its duty, but simply, to leave the
question of wages to the expertise of experts. As Justice Cruz
observed, "[w]ith the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it
more necessary to entrust to administrative agencies the power of
23
subordinate legislation” as it is called."
The Labor Code defines “wage” as follows:
“Wage” paid to any employee shall mean the remuneration or earnings,

however designated, capable of being expressed in terms of money. whether
fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work
done or to be done, or for services rendered or to be rendered and includes
the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to
the employee. “Fair and reasonable value” shall not include any profit to the
24
employer or to any person affiliated with the employer.
________________
20 Rep. Act No. 6727, supra.

21 e.g., CONST., art. II, sec. 20.
22 Philippine Association of Service Exporters v. Drilon, G.R. No. 81958, June 30,
1988, 163 SCRA 386.
23 CRUZ, PHILIPPINE POLITICAL LAW 96 (1987).
24 Pres. Decree No. 442, art. 97(f).
767
VOL. 201; SEPTEMBER 24, 1991 767

The concept of “minimum wage” is, however, a different thing, and

certainly, it means more than setting a floor wage to upgrade existing
wages, as ECOP takes it to mean. “Minimum wages” underlies the
effort of the State, as Republic Act No. 6727 expresses it, “to
promote productivity-improvement and gain-sharing measures to
ensure a decent standard of living for the workers and their families;
to guarantee the rights of labor to its just share in the fruits of
production; to enhance employment generation in the countryside
through industry dispersal; and to allow business and industry
25
reasonable returns on investment, expansion and growth," and as
the Constitution expresses it, to affirm “labor as a primary social
26
economic force." As the Court indicated, the statute would have no
need for a board if the question were simply “how much”. The State
is concerned, in addition, that wages are not distributed unevenly,
and more important, that social justice is subserved.
It is another question, to be sure, had Congress created “roving”
boards, and were that the case, a problem of undue delegation would
have ensued; but as we said, we do not see a Board (National Capital
Region) “running riot” here, and Wage Order No. NCR-01-A as an
excess of authority.
It is also another question whether the salary-cap method utilized
by the Board may serve the purposes of Republic Act No. 6727 in
future cases and whether that method is after all, a lasting policy of
the Board; however, it is a question on which we may only speculate
at the moment. At the moment, we find it to be reasonable policy
(apparently, it has since been Government policy); and if in the
future it would be perceptibly unfair to management, we will take it
up then.
WHEREFORE, premises considered, the petition is DENIED.
No pronouncement as to costs.
IT IS SO ORDERED.
Melencio-Herrera (Chairman), Padilla and Regalado, JJ.,

concur.
________________
25 Rep. Act No. 6727, supra, sec. 1.

26 CONST., art. II, sec. 18, supra,
768

Johnson & Johnson (Phils.) Inc. vs. Court of Appeals,
Paras, J., No part. Son is member of counsel for petitioner.
Petition denied.
——o0o——
© Copyright 2021 Central Book Supply, Inc. All rights reserved.

13 EmployersConfederationofthe Philippines v. NWPC

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

13 EmployersConfederationofthe Philippines v. NWPC

Uploaded by

Copyright:

Available Formats

5/19/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 201

VOL. 201, SEPTEMBER 24, 1991 759

EMPLOYERS CONFEDERATION OF THE PHILIPPINES,

Labor Law; Wages; The National Wages and Productivity Commission

780 SUPREME COURT REPORTS ANNOTATED

Employers Confederation of the Phils. vs. National Wages and Productivity

above-quoted standards are sufﬁcient, and in the light of the ﬂoorwage

The facts are stated in the opinion of the Court.

VOL. 201, SEPTEMBER 24, 1991 761

questioning the validity of Wage Order No. NCR-01-A dated

1 Rep. Act No. 6727, sec. 4(a).

762 SUPREME COURT REPORTS ANNOTATED

ECOP appealed to the National Wages ‘and Productivity

VOL. 201, SEPTEMBER 24, 1991 763

Historically, legislation involving the adjustment of the minimum wage

As the Commission noted, the increasing trend is toward the second

764 SUPREME COURT REPORTS -ANNOTATED

Employers Confederation of the Phils. us. National Wages and

as the Commission observed and as we are ourselves agreed,

ART. 124. Standards/Criteria for Minimum Wage Fixing.—The regional

"(a) The demand for living wages;

12 Rep. Act No. 6727, supra.

VOL. 201, SEPTEMBER 24, 1991 765

Employers Confederation of the Phils. vs. National Wages and

766 SUPREME COURT REPORTS ANNOTATED

“Wage” paid to any employee shall mean the remuneration or earnings,

20 Rep. Act No. 6727, supra.

VOL. 201; SEPTEMBER 24, 1991 767

The concept of “minimum wage” is, however, a different thing, and

Melencio-Herrera (Chairman), Padilla and Regalado, JJ.,

25 Rep. Act No. 6727, supra, sec. 1.

768 SUPREME COURT REPORTS ANNOTATED

Paras, J., No part. Son is member of counsel for petitioner.

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

You might also like